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Set up central agency with experts to evaluate big loan proposals: ICAI

There are several small banks that don't have proper means to appraise loan proposals, in such cases, a central agency to look at these proposals will play a better role

Press Trust of India  |  New Delhi 

Investigate, Vigilance, Investigation

Cost accountants' apex body has suggested constituting a central agency, with cost accountants and experts from other fields, to evaluate applications for large loans before give their approval.

The suggestion comes at a time when the country's banking system is grappling with mounting sour loans and authorities are working on multi-pronged strategies to deal with the NPA menace.

For the appraisal of the big that the get, the ministry should look at constituting a central agency, President Sanjay Gupta told PTI.

The agency will carry out cost evaluation of the as well as audit the efficiency of the projects concerned, he added.

In an interview, he said the agency can have cost accountants and experts from other fields.

The non-performing assets (NPAs) in the crossed Rs 9 trillion at end-December 2017 and the Reserve Bank of India has warned of further worsening of the situation.

According to Gupta, the big have better means for research and development and they can better evaluate the

However, there are several small banks that do not have proper means to appraise them, he said, adding that in such cases, a central agency to look at the loan proposals will play a better role.

"When a project is fully funded by the banks using money which belongs to the people, then why should there be any secrecy from the side of the companies with regard to evaluation? There should be complete transparency in it," Gupta said.

The Institute of Cost Accountants of India (ICAI) represents cost accountants.

First Published: Sun, July 08 2018. 15:12 IST
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